Alien Worth $577 Million

Alien Technology, the Silicon Valley-based manufacturer of RFID readers and inlays, enjoys a current valuation of more than a half-billion dollars. This sum is based on the value of a recent divestiture by Quan Ventures.

February 2, 2006—Alien Technology, the Silicon Valley-based manufacturer of RFID readers and inlays, enjoys a current valuation of more than a half-billion dollars. This sum is based on the value of a recent divestiture by Quan Ventures. The Swiss venture capital firm reports on its website that it sold its position in Alien to an existing Alien investor on January 17. "The transaction valued Alien at $577 million," says the report.

Alien's most recent funding came in late July of last year, when the company announced a $66 million H round. CEO Stav Prodromou said at the time, "The success of this latest round of financing underscores investor interest in the RFID arena." Indeed. With over $200 million in private financing, Alien is one of the most heavily funded RFID pure-plays. It is also a possible candidate for an initial public offering.

Leading RFID chip manufacturer Impinj of Seattle, Washington, might beat Alien to the punch, however. Impinj has been vocal about its IPO intentions. When it received $26.5 million in funding in December, a company representative told RFID Update that it would likely be the last round the company sought (read the article). With a rosy 2006 outlook and steady progress toward profitability, the rep said an Impinj IPO is "certainly on the horizon."

Two publicly-traded RFID companies would quench what appears to be investor thirst for opportunities to "ride the RFID wave." To date, investments in Zebra, Symbol, and Intermec have been widely cited as the closest thing to such an opportunity. But RFID still doesn't contribute significantly to any of their bottom lines, making them imperfect choices for RFID stock picks.

And don't forget VeriChip, which in December filed for a 2006 IPO valued at $45.8 million. The "RFID for people" company represents an opportunity to invest in RFID, but not the supply chain market which is predicted to drive the strong long-term growth. Also, VeriChip is seen more as a fringe company whose controversial human-tagging products are the favorite target of anti-RFID campaigners from the privacy advocate and mark-of-the-beast camps alike.

Expect to see increased activity related to private and public funding as well as mergers and acquisitions. (Yesterday, reader manufacturer ThingMagic announced an investment from networking giant Cisco, for example.) As RFID technology matures and the demand for it grows, the market will become ever more attractive to investors in 2006, 2007, and beyond.

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